A Capital Scholar

The dismal science has a happy warrior in professor Bruce Sacerdote ’90.

George M. Spencer | Jul - Aug 2018

“To me, being able to make a difference in society is the ultimate goal,” says economics professor Bruce Sacerdote. Now in his 20th year at Dartmouth, he’s known for his work studying families and college life—areas not usually associated with econ types. As a result of his research, for example, Duke University recently randomized its roommate selection process to promote friendships among students from different racial and cultural backgrounds. “I’ve worked really hard to do things that are interesting, help people, make sense, and that I can explain to undergraduates and the general public.” Here are just a few of his fascinating findings.

“The outcomes of my research are very meaningful to me,” says Sacerdote. “If I were writing super-theoretical models of consumer behavior, I could stay interested only if I thought that doing so would lead to something tangible. I’m doing something concrete that makes a difference.”

2017Our Influencers
Friends and peers shape peoples’ lives, happiness, and careers, but economists had paid little attention to this. Enter Sacerdote. “Colleagues and I did studies at Dartmouth and the Air Force Academy on the influence of roommates, floormates, and dormmates—interesting groups because of the nearly random assignments involved. Peers have an enormous effect on the education process. There’s a lot of peer-to-peer teaching in terms of what fields students explore. We also found that roommates have a huge influence on career choices, attitudes on race and inequality, and drinking. They impact grades, too, though those effects are more modest.”

2017The Upside of Fracking
Fracking has had a positive impact on the U.S. economy. Sacerdote and two colleagues found it benefits localities in two main ways. One, counties where fracking occurs see sustained income growth, as most income generated by fracking stays within 100 miles. (Plus, landowners get royalties based on the value of what’s taken from their land.) Second, beyond energy industry jobs, these counties see significant spillover hiring in the retail, health, and government sectors without any major change in crime. “Overall, fracking modestly offset drops in employment during the Great Recession by nearly half a percent,” says Sacerdote.

2017Buying Power
The professor says it’s a myth that workers are worse off now than in the 1970s. “Today you can buy a smartphone for what it cost to buy a color TV then,” he says. “There’s been tremendous progress, even though inflation-adjusted wages haven’t moved much.” He believes such woeful thinking is caused by job insecurity, healthcare worries, and social media, which make people anxious, even though their true spending power has risen. “Households are better off,” he says. “Using more sophisticated inflation adjustment, wages are up 30 percent since the 1970s, and the purchasing power of median households has risen 80 percent.”

2016College Incentives
Growth in the number of Americans receiving bachelor’s degrees has stalled. Sacerdote and his coauthors studied what marginal high school students need to successfully apply to college and thrive on campus. They tried various tactics, including paying seniors cash bonuses to apply and having colleges send them personal letters of encouragement. The intervention that by far worked the best? Using college-aged mentors to coach high school students through the application process. Once they’re in college, support systems matter a great deal. There’s strong correlation between the personal support these students get and their graduation rate.

2005Kid Stuff
“When it comes to raising children, I wanted to know which plays a stronger role—nature or nurture?” says the father of three. To learn the answer, he collaborated with the nation’s largest international adoption agency because its methodology for assigning children doesn’t let wealthier parents select infants based on health or information about the birth mother. “Adoptive parents’ resources and environment matter much more in terms of educational outcomes and children’s ultimate incomes, marital status, and education than researchers had thought, even though genes still play a powerful role,” says Sacerdote.